spwm ducwellsThe sharp decline in oil prices during the last quarter of the year was expected to cause a slowdown in well completions in the Permian and other active basins. One early confirmation was seen in an increase in the number of drilled but uncompleted wells as reported by the Energy Information Administration.

The number of DUCs in the six leading oil basins increased by 3.68 percent in November from the month before.

However, the actual number of true drilled uncompleted wells in Texas may be lower, according to a presentation at a conference in Houston in December.

A report published in a Houston newspaper described a presentation by Russell Hall, of R.K. Hall and Associates, an engineering firm in Midland, Texas. in which he said the actual number of Permian DUCs is closer to 1,600.

The difference, Hall stated, is that operators often delay reporting first production and the sharp increase in well filings this year has caused a backlog at the Texas Railroad Commission. He added that many operators now conduct simultaneous well completions on offset wells to avoid frac hits on neighboring wells. As a result, some wells are drilled but not completed until the offset wells are ready.

One likely benefit of a slowdown in new wells brought online: a slowing of the steep increase in associated gas flaring.

According to Norwegian petroleum analysts, Rystad Energy, gas flaring in the Permian soared to 407 MM cf/d in the third quarter and was expected to climb higher once final reports are filed. Much of the record level of gas flaring in the Permian, Rystad stated, is attributed to pipeline bottlenecks. As capacity increases in the second half of 2019, gas flaring growth is expected to slow.